Hhhhmmmm, wonder whats going on here?
From the BBC: What do you get when you mix two Japanese nationals with some fake US government bonds, a slow train to Switzerland and members of the Italian financial guard?
The answer is a $134bn (£82bn; 97bn euros) conspiracy theory which has fired up a whole realm of financial bloggers on the internet. See story HERE
It seems that countries that pay the most in taxes are also the most happy: The Organization for Economic Cooperation and Development says people in Denmark, Finland and the Netherlands are the most content with their lives. The three ranked first, second and third, respectively, in the OECD’s rankings of “life satisfaction,” or happiness.
There are myriad reasons, of course, for happiness: health, welfare, prosperity, leisure time, strong family, social connections and so on. But there is another common denominator among this group of happy people: taxes.
Northern Europeans pay some of the highest taxes in the world. Danes pay about two-thirds of their income in taxes. Why be so happy about that? It all comes down to what you get in return. The Encyclopedia of the Nations notes that Denmark was one of the first countries in the world to establish efficient social services with the introduction of relief for the sick, unemployed and aged. … Simply, you pay for what you get.
Taxes in the U.S. have taken on a pejorative association because, well, we are never really quite sure of what we get in return for paying them, other than the world’s biggest military. Healthcare and other such social services aren’t built into our system. That means we have to worry more about paying for things ourselves. Worrying doesn’t equate to happiness.
The U.S. ranked 11th on the OECD list. In addition to the top three, we were beat out by Sweden, Belgium, Canada, Australia, New Zealand, Switzerland and Norway. See full story HERE from TaxProf Blog.
Faced with losing his home if he cannot find €6,000 (£5,350) by the end of this week, Javier Martínez has resorted to desperate measures: the unemployed father-of-four is selling his own flat and throwing in another, free.
The three-bedroom apartment in Tarazona, near Zaragoza in eastern Spain, is on the market for only €57,000. The former construction project manager is including a one-bedroom flat that he had been letting in an attempt to entice a buyer.
“I need to find the cash by May 15 or I may be declared bankrupt. I must provide for my children,” Mr Martínez said. He is one of hundreds of thousands of Spaniards facing ruin as Spain’s economy heads for meltdown.
The number of Spaniards unable to pay their debts has risen by 26 per cent to 2.7million in 2009, compared with the first four months of last year. During the same period 232,000 companies joined the list of bad debtors, a 67 per cent rise, according to AsNef-Equifax, a Spanish credit agency. See the rest of the story from The Times OnLine HERE
A MACABRE traffic associated with poor countries in Asia and Latin America has sprung up for the first time in western Europe as the credit crunch reduces Spaniards to selling organs to “transplant tourists”.
Spanish “kidney for sale” advertisements have proliferated recently on the internet as people struggle to make ends meet in a country whose 17% unemployment rate is the highest in Europe.
Sergio, a 42-year-old welder and father of four, said he had received an offer of £20,000 from a German couple who needed his kidney for their five-year-old son. If tests showed them to be compatible, an operation would be performed in a “third country” since such transactions are illegal in Europe.
“Apparently, there’s a waiting list of at least five years for a kidney in Germany,” he told a television programme, “but in five years the kid will be dead.” Read full story from The Times Online HERE
The European Commission has revised economic forecasts sharply downwards and pushed recovery predictions out to the second half of 2010 in the face of the “deepest and most widespread recession in the post-war era”.
Brussels is now expecting Europe’s GDP to contract by 4 per cent this year, twice the 1.8 per cent predicted just three months ago. The slump will also last longer, with a further decline of 0.1 per cent in 2010, compared with earlier forecasts of 0.5 per cent growth.
Of the major EU countries, Germany will fare the worst, with a 5.5 per cent decline in 2009. But the Commission’s assessment will also make grim reading for the Chancellor of the Exchequer. The UK economy is expected to lose between 4 and 4.5 per cent in 2009, a far bleaker prediction than the 3.5 per cent forecast in Mr Darling’s Budget. Italy is also expected to contract by up to 4.5 per cent, France and Spain by 3 per cent. See more of the story from The Independent HERE
More “Crisis” bloodshed? Reminds of the old song with the lyrics “don’t push me because I’m close the edge”….
“Five people were killed and several others hurt in the Netherlands after a car rammed into a crowd of spectators in what police are calling a premeditated attack on the royal family.”
“The motive for the attack was unclear. Dutch media, citing neighbors, said the assailant recently was fired from his job and was to be evicted from his home. Police identified him as a 38-year-old Dutch man with no history of mental illness or police record, but they would not release his name.” More of the story HERE
How is the crisis affecting certain criminal activity’s?
The Mafia in Italy (and I am sure everywhere else) is finding lots to exploit:
“While businesses around the world are hunkering down for survival, the Italian mob is living a golden moment.
Italy’s various organized crime syndicates — often lumped together colloquially as Mafia Inc. — are gobbling up gas stations, muscling in on supermarket franchises, making loans to cash-starved businesses, taking over trattorias and acquiring buildings in swank neighborhoods in Rome and Milan, investigators say.
These mobsters have lots of what is in short supply for many businesses these days — liquidity — as well as centuries-honed expertise in preying on the vulnerable, whose ranks are swelling in the current financial crisis.
It all means the mob is free to sink cash into two areas that lie at the heart of the global meltdown: real estate and credit markets.
The crime syndicates are flush with billions of euros from extortion rackets, drug trafficking and booming sales in fake designer clothing made in China expressly for the Italian mob — an increasingly lucrative trade as hard-hit consumers search for bargains, prosecutors and police said in recent interviews.
For the mob bosses, the global economic meltdown “is only an advantage,” said anti-mafia prosecutor Franco Roberti, in his office in Naples, the chaotic port city that is home to the Camorra, one of the Italy’s major crime syndicates.” See full story HERE
And Brothels in Germany (and again, I am sure in other countries) are offering discounts and “extras” : It has not taken long for the global financial crisis to affect the world’s oldest profession in Germany.
In one of the few countries where prostitution is legal, the industry has responded with an economic stimulus package of its own: modern marketing tools, rebates, discounts and gimmicks to boost falling demand.
Some brothels have cut prices or added free promotions, while others have introduced all-inclusive flat-rate fees. Free shuttle buses, discounts for seniors and taxi drivers, as well as “day passes” are among marketing strategies designed to keep business going.
“Times are tough for us too,” said Karin Ahrens, who manages the Yes, Sir brothel in Hanover. Revenue had dropped by 30 per cent at her establishment, she said, while turnover had fallen by as much as 50 per cent at other clubs. “We’re definitely feeling the crisis. Clients are being tight with their money. They’re afraid. You can’t charge for the extras any more and there is pressure to cut prices.” See full story from The Independent HERE
Spain ends up at the top for highest unemployment.
From the Telegraph:
More than four million Spanish people are out of work. According to the country’s National Statistics Institute a record high figure of 17.4 per cent were unemployed in the first quarter of the year.
Unemployment leapt from 13.9 per cent in the fourth quarter of 2008, the biggest quarterly jump since 1976. Joblessness in Spain has almost doubled in a year.
The Bank of Spain had previously forecast that unemployment would not surpass 17.1 per cent for the year. Alarmingly, 1,068,400 families have every member out of work.
And as the dole queues lengthen, labour unrest is growing. Two hundred pickets yesterday picketed a shipyard in the Basque country to protest at the employment of cheap Romanian and Portuguese workers that is threatening the jobs of 1,100 local workers. See full story HERE
Mainland Europe is bracing itself for thousands more job cuts as Philips warned of further restructuring to staunch mounting losses and the German arm of Woolworths filed for bankruptcy.
In Switzerland the country’s biggest bank, UBS, is reportedly planning to axe up to 10,000 more jobs as early as next week as it struggles to regain profitability – and credibility.
And as ArcelorMittal, the world’s biggest steelmaker, confirmed it would cut output by half and mothball several plants, unions urged the group to retain the current workforce in readiness for any upturn.
Dutch group Philips, one of the earliest continental firms to report first-quarter earnings, said it had already axed 5,216 jobs this year and the number of its employees had fallen by 18,030 in a year, with 5,600 due to discontinued operations.
Warning that demand in the current quarter would be weak after slumping more than expected in the first three months, the world’s biggest lighting business and Europe’s biggest consumer electronics firm said: “Consequently, we will accelerate measures to further lower our fixed cost base.” See full story from The Guardian HERE
Here comes the summer of rage?
A warning of more attacks on UK bankers was made on Wednesday after the home of former Royal Bank of Scotland boss Fred Goodwin was vandalized.
Windows were smashed in Goodwin’s house in the Scottish capital Edinburgh and those of a Mercedes-Benz limousine parked outside.
It is not known if anyone was at home at the time. Goodwin — dubbed “Fred the Shred” by the media for his ruthless cost-cutting — and his family have not been living in the house since it was revealed that the 50-year-old Goodwin was receiving an annual pension of $1 million (£700,000) for life.
A statement issued to media organizations including the Press Association after the attack said: “We are angry that rich people, like him, are paying themselves a huge amount of money and living in luxury, while ordinary people are made unemployed, destitute and homeless.
“Bank bosses should be jailed. This is just the beginning.”
No group was named in the message and it did not explicitly claim responsibility for the attack.
Goodwin took early retirement after RBS nearly collapsed amid the economic crisis and was later part-nationalized.
On the same day as the size of his pension was revealed RBS announced a UK record loss of $34.6 billion (£24.1 billion) for 2008.
Politicians and commentators have expressed fury about the deal and excessive bonuses being given by bailed-out banks. See more from CNN HERE
The Czech government collapsed Tuesday after losing a parliamentary no-confidence vote over its handling of the economic crisis.
It was a huge embarrassment for Prime Minister Mirek Topolanek, coming just days before a planned visit by President Barack Obama and midway through the Czech Republic’s six-month European Union presidency.
The lower house of Parliament voted 101-96 to declare no confidence in the three-party coalition government, after four lawmakers broke rank with their parties and voted with the opposition. Three legislators were absent from the vote.
It was the first time a government has been ousted by parliament since the country came to existence after the 1993 split of Czechoslovakia.
Topolanek said he could resign after a planned trip to Brussels on Wednesday. “I take the vote into account and will act according to the Constitution,” he said.
There has been no indication of whom President Vaclav Klaus might choose to form a new Cabinet. If three attempts to form a government fail, early elections must be called.
Topolanek’s minority coalition took charge in January 2007, after months of difficult negotiations following 2006 general elections that resulted in no clear winner.
The government has struggled to resolve deep divisions within Parliament over whether to allow components of a U.S. missile defense shield on Czech territory, and whether to adopt the EU reform treaty to streamline decision-making in the bloc.
Story continues below
In recent months, opposition lawmakers also said they became frustrated with the government’s response to the global economic slowdown. Before the crisis, the Czech Republic’s export-oriented economy had been growing fast, but the country is expected to enter a recession this year. Annual industrial output fell 23.3 percent in January.
The opposition said the government acted too late and did too little _ approving a stimulus package only last month worth 70 billion koruna ($3.5 billion), including measures for investments in ecology and infrastructure along with tax cuts and loan guarantees.
“The government got what it deserved,” said former Prime Minister Jiri Paroubek, who leads the opposition Social Democratic party. “It was not able to handle the affects of the economic crisis.” Paroubek said, however, that he was not against Topolanek’s government staying in office until the end of the Czech term leading the EU presidency.
The European Union executive said it trusted the Czech Republic would be able to continue its duties in the EU presidency.
“It is for the Czech Republic’s democratic process under the constitution to resolve the domestic political issues; the Commission is confident that this is done in a way which ensures the full functioning of the Council Presidency,” the European Commission said in a statement.
Meanwhile, it will likely be left to a new government to deal with the two other main issues in Czech Parliament _ the proposed U.S. missile defense project and the EU reform treaty.
The Czech Parliament’s lower house has passed the so-called Lisbon Treaty, but the upper house _ controlled by Topolanek’s own Euro-skeptic party _ has yet to vote on it. All 27 EU nations must approve the treaty for it to take effect.
The government’s deal to allow a U.S. radar base near Prague is also up in the air. Topolanek was forced last week to withdraw legislation on the U.S. missile defense plan from lower house because he did not have enough votes to ensure it would pass.
The missile defense shield was likely to be high on the agenda during Obama’s visit April 4-5 to Prague. Obama has never said if the U.S. will go ahead with the deal, brokered under President George W. Bush.
The opposition has argued against the missile defense plan because it could anger Russia, which has vehemently opposed the missile shield within its former sphere of influence. Washington has said the shield, also including 10 interceptor missiles to be housed in neighboring Poland, would protect Europe from attacks by “rogue states” in the Middle East. See more from The Huffington Post
HERE
On the heels of the recent ruling changing the laws about accepting large denominations of euros which possibly stimulated the economy and definitely helped the mafias and criminal gangs, comes this:
“Spain is offering impunity for those bringing money into the country from financial havens to buy public debt
The Spanish Government has announced that it has prepared, via a Royal Decree, a method to invest in public debt in Spain bringing in the money from financial havens, which will grant total impunity to the owners of the cash.
In addition such money will not be subject to tax, and the Royal Decree also cancels the obligation to declare the identity of the owner if non-resident, its country of precedence, and the amount involved.”
When a country is so broke that it is practically begging for dirty money, you know how bad things really are.
See full story HERE
From The Telegraph:
Investors take out short trades when they expect a currency to fall. In recent days, futures traders in the US have significantly increased their bets that the euro will fall against the dollar. Data released by the Washington-based Commodity Futures Trading Commission on Friday showed that the “net short position” of trades against the euro by hedge funds and speculators almost doubled in the week to March 3 to 19,431 contracts from 10,081 contracts a week earlier.
“Quite a significant correction in the euro is coming in the next few months. The European Central Bank (ECB) is behind the curve in getting to grips with its economic problems,” said David Buik of BGC Partners. He added that the eurozone entered recession later than other economies, but policy-makers had been too slow to act, putting the currency at risk.
The global recession means that the euro is facing its strongest test since its launch a decade ago as the less productive countries such as Spain, Greece and Italy have failed to match the efficiency of some of Europe’s faster growing economies. See full story HERE
Was Milton Friedman correct in predicting trouble for the Euro?
From The Telegraph:
During the current crisis we have several times heard invoked the wisdom of Milton Friedman about the unfeasibility of the euro as a currency surviving a recession. In an interview not long before his death three years ago, Friedman said: “The euro is going to be a big source of problems, not a source of help. The euro has no precedent. To the best of my knowledge, there has never been a monetary union, putting out a fiat currency, composed of independent states. There have been unions based on gold or silver, but not on fiat money – money tempted to inflate – put out by politically independent entities.” See full story HERE
So much for a compelling display of European unity. A disastrous summit in Brussels at the weekend laid bare what everyone already knew: the global economic crisis is threatening to tear apart both the continent’s single market and the peaceful transition to a prosperous European era after the dissolution of the USSR.
Mirek Topolanek, prime minister of the Czech Republic, one of the first former Eastern Bloc countries to hold the European Union’s rotating presidency, warned of “the greatest crisis in the history of European integration”. Ferenc Gyurcsany, his Hungarian counterpart, spoke of fears that the economic meltdown would lead to the abandonment of poor by rich, of East by West. “We do not want any new dividing lines. We do not want a Europe divided along a North-South or an East-West line … We should not allow a new Iron Curtain to be set up.”
But disputes between East and West were very much in evidence. Germany scoffed at Hungary’s call for a mass bail-out of economies near the brink in eastern Europe. The French, who recently handed the EU presidency to the Czechs, continued to act like disruptive back-seat drivers. Nicolas Sarkozy openly suggested the Czechs were not up to the task of running the EU. See story from THE TELEGRAPH HERE
When the United States sneezed, Old Europe’s banks caught a heavy cold, and New Europe’s mini-tiger economies have succumbed, one by one, to a nasty bout of flu. But in the so-called neighbourhood states immediately to the east, chief among them Ukraine, pneumonia threatens – and the experts’ prognosis is not good.
International financiers will say, without wanting to be quoted, that Ukraine is already, for all practical purposes, bankrupt. They do not like the D-word, default, though that is clearly on their mind. Ukrainian officials like the word still less, smacking as it does of national humiliation. But the taboo was broken in recent days, when a senior IMF official, Marek Belka, director of the fund’s European department, was quoted in the Ukrainian press as rejecting that idea. Which, in many Ukrainian minds, only made the prospect more real.
D-day – in almost every sense – could come as early as next Saturday when Ukraine has to pay its next instalment for Russian gas deliveries under the agreement painfully negotiated in January. It is grimly forecast that Kiev will not be able to pay, so triggering a new cut-off. Even if this particular Armageddon is averted, there is still April – when the warmer days of spring will still be only on the horizon. See story from the THE INDEPENDENT HERE
From the Times Online:
Eastern European countries gave an apocalyptic warning yesterday of hordes of unemployed workers heading west as a new Iron Curtain divides rich from poor inside Europe.
Twenty years after the fall of the Berlin Wall, Western leaders were told yesterday that five million jobs could be lost in the “new” European Union countries of the East unless radical action were taken to bail them out.
The spectacular collapse of some of the post-communist tiger economies led to demands at an EU summit in Brussels for a rescue fund of €190 billion (£170 billion) to stop social collapse in the Eastern nations spilling over into the rest of Europe. See more HERE
Over at The Daily Kos a diary on what may be impending doom for Europe. If a 16.3 TRILLION bailout is needed, they will get that money by printing it and you know what that means: See full story HERE
On the edge of a village in south-west France, an expat’s dream is coming to a very public end.
Victoria Butcher has put her house on the market and is also selling all of its contents – everything from the fridge to her children’s clothes.
Even the chickens, so symbolic of the good life, are up for sale (though strictly on the condition that the buyer keeps them for their eggs and does not eat them for Sunday lunch). ‘I am desperate,’ says the softly-spoken 42-year-old, who three years ago left her job with the education authority in Hampshire to seek a better life for her family in France.
‘I am here alone with my three children and I have run out of money. Despite trying for a year, I can’t find a job and can’t sell my house – the buyers have dried up, particularly the British. What else could I do? I have no choice but to sell everything I can.’
And so her neighbours trawl through her belongings, handing over five euros for some
crockery, ten for a wooden chair.
That Victoria’s dream of life in France should come to this is clearly distressing for her. But the sad truth is that she is far from alone.
What the French termed l’invasion anglaise is under serious threat. Across Aquitaine, a region where 30,000 expats live, a silent but steady retreat is being beaten as house contents are packed into removal lorries ahead of the long journey back north.
The British inhabitants here have been hit by a combination of factors. First, France is suffering the effects of the credit crunch like the rest of the world.
Unemployment is already above two million. And when it comes to handingout the few jobs there are, the British aren’t exactly first in line. See story from The Mail Online HERE
From Safe Haven:
Milton Friedman famously predicted that the euro would not last past their first economic crisis. This week we look at commentary by Niels Jensen that explores the news from Euroland. Can the euro survive? He explores a number of options which are most definitely not on the radar screen for most investors. It is good to get a perspective from those outside of our own back yard. HERE
From Ambrose Evans-Pritchard at The Telegragh:
If mishandled by the world policy establishment, this debacle is big enough to shatter the fragile banking systems of Western Europe and set off round two of our financial Götterdämmerung.
Austria’s finance minister Josef Pröll made frantic efforts last week to put together a €150bn rescue for the ex-Soviet bloc. Well he might. His banks have lent €230bn to the region, equal to 70pc of Austria’s GDP.
“A failure rate of 10pc would lead to the collapse of the Austrian financial sector,” reported Der Standard in Vienna. Unfortunately, that is about to happen.
The European Bank for Reconstruction and Development (EBRD) says bad debts will top 10pc and may reach 20pc. The Vienna press said Bank Austria and its Italian owner Unicredit face a “monetary Stalingrad” in the East.
Mr Pröll tried to drum up support for his rescue package from EU finance ministers in Brussels last week. The idea was scotched by Germany’s Peer Steinbrück. Not our problem, he said. We’ll see about that.
Stephen Jen, currency chief at Morgan Stanley, said Eastern Europe has borrowed $1.7 trillion abroad, much on short-term maturities. It must repay – or roll over – $400bn this year, equal to a third of the region’s GDP. Good luck. The credit window has slammed shut. See the rest of the story HERE
From The Financial Times: Countries in the eurozone face their worst recession in half a century after data on Friday revealed that the economic slump late last year was even steeper than feared.
Eurozone gross domestic product fell 1.5 per cent in the fourth quarter, led by a dramatic deterioration in Germany. This highlighted how the fortunes of the world’s economies have become entwined as the global crisis has unfolded.
As finance ministers from the G7 group of industrial nations gathered for a summit in Rome, Alistair Darling, UK chancellor, said Germany’s difficulties demonstrated that economies were going through “one of the severest downturns in generations” and that “governments must take extraordinary actions at extraordinary times”. See story HERE
I ask: Are Europeans finally figuring out the EU and its treaties and rules with mean the death of a democratic Europe? That you have sold your soul (and your culture and your wallet) the controllers? It seems so, and that even some in the press are finally willing to admit it…
“The peoples of Europe have finally discovered what they signed up to. I do mean “peoples” (plural) because however much political elites may deceive themselves, the populations of the member states of the EU are culturally, historically and economically separate and distinct. And a significant proportion of them are getting very, very angry.
What the strikers at the Lindsey oil refinery (and their brother supporters in Nottinghamshire and Kent) have discovered is the real meaning of the fine print in those treaties, and the significance of those European court judgments whose interpretation they left to EU obsessives: it is now illegal – illegal – for the government of an EU country to put the needs and concerns of its own population first. It would, for example, be against European law to do what Frank Field has sensibly suggested and reintroduce a system of “work permits” for EU nationals who wished to apply for jobs here.
Meanwhile, demonstrators in Paris and the recalcitrant electorate in Germany are waking up to the consequences of what two generations of European ideologues have thrust upon them: the burden not just of their own economic problems but also the obligation to accept the consequences of their neighbours’ debts and failures. Each country is true to its own history in the way it expresses its rage: in France, they take to the streets and throw things at the police, in Germany they threaten the stability of the coalition government, and here, we revive the tradition of wildcat strikes.
But the response from the EU political class is the same to all of these varied manifestations of resistance. Those who protest are being smeared with accusations of foolhardy protectionism or racist nationalism when they are not (not yet, anyway) guilty of either. It is not purblind nationalism, let alone racism, to resent the importation of cheap labour en masse when its conditions of employment (transport and accommodation provided, as seems to be the case at Lindsey) allow it to compete unfairly with indigenous workers. The drafting in of low-wage work gangs has always been seen as unjust: exploitative of the foreign workers, and destructive of the social cohesion of existing communities which, incidentally, is something about which the Tories say they are much exercised. So can the protesters expect their support?” See this fine article from The Telegraph here Wildcat oil strikes: Europeans are finally waking up to the demise of democracy
The French, doing one of the things that they know best (and that I admire them for) have gone on strike. The public and private sector are in the streets to protest the economic crisis and try to convince Sarkozy to do more. See full story HERE
Also, is this Europe’s winter of discontent and how bad will the bad get?
The French are in revolt. On Thursday, teachers, television employees, postal workers, students and masses of other public-sector workers will be united in a hugely-popular strike with car workers, supermarket staff, journalists and thousands of others in the private sector.
One poll said that 75 per cent of the public supported the action, which has the backing of the large union groups and opposition socialists. It will be a big test for President Nicolas Sarkozy but, more importantly, the strike will mark the biggest protest so far in one of the world’s largest economies against the grief and distress being caused by the catastrophic global downturn.
A depression triggered in America is being played out in Europe with increasing violence, and other forms of social unrest are spreading. In Iceland, a government has fallen. Workers have marched in Zaragoza, as Spanish unemployment heads towards 20 per cent. There have been riots and bloodshed in Greece, protests in Latvia, Lithuania, Hungary and Bulgaria. The police have suppressed public discontent in Russia, and will be challenged again at large gatherings this weekend.
This is turning into Europe’s winter of discontent. Protests are widespread and gathering pace. It seems to be about national interests superceding the common cause that has united countries for decades.
Comparisons with the Thirties have tended to focus on the numbers – a lack of growth and waning consumer confidence, an increase in business failures and job losses, collapsing stock markets and currencies and panicky runs on banks. See full story HERE
